The End of Another Incomes Policy

AMERICA

From MURRAY KEMPTON

AMAGANSETT. LONG ISLAND

HERE the descendants of the immigrants who irritated Henry James by littering Central Park with their Russian newspapers irri- tate us into the third generation by stacking the beach with their electric guitar cartons; and women whose sovereignty over the male would seem excessive to Blanche of Castille lie escaping into The Story of 0; and the particular com- fort of these spectacles is the evidence they give of just how great amount of ruin there is in a country.

Enough ruin, it would clearly appear at a distance, to pass comfortably through the public effects, all about us, of the destruction of the legend of Mr Johnson's omnicompetence. July ended with all our private factions revolting from and escaping the Great Manager; now every day the factions seem closer to the state where they will manage him.

The President's perplexities and distractions began with rude mechanics. Last July 8, 35,000 workers on five of our airlines went on strike; the results were more inconvenient than truly afflicting, and Mr Johnson observed them with more tolerance than was his custom a year ago, when his confidence in his powers was more boundless than it is today.

When he moved at last, it was with more pomp than power; he appeared with the parties only when he was assured that they were already agreed and he seemed to show himself far more the ceremonial than the active figure he used to delight in. But two days later even the formal honours attendant upon this posture were sud-

denly and shockingly taken away from him. The striking mechanics of the International Association of Machinists voted down the pro- posed agreement and, by midweek, the Presi- dent's only hope was that the Congress, out of residual loyalty, could pass a law ordering the strikers back to work. This would at least ensure that the onus for breaking a strike in an election year would not be his alone.

The strikers would certainly use the events to get themselves a larger pay raise than had been originally offered. Yet even this earlier, scorned concession had quite overrun the .acceptable norm which had been conceived by President Kennedy and sustained by President Johnson by heroic exercise of bluff and persuasion as his government's main bastion against inflation.

Both administrations had tried to keep union .settlements down to an annual rise of no more than 3.2 per cent, a figure embalmed for two decades of our Statistics as the factor of average improvement in both productivity and wages. it was not a figure whose mystery could survive the test of times when prices are rising at a rate close to 3 per' cent a year and when jet planes have not added to, so much as multiplied, the efficiency of air transport.

Yet the fact that the employees of an industry so immensely profitable as air transport could . temporarily imagine themselves bound by the same limitations on wage increases as the em- ployees of distressed garment manufacturers was a tribute to the general acceptance of the Presi- dent's illusion that the laws of navigation had been suspended for the United States merely be-

'There we are, luv, sign here!'

cause he was captain of the ship. Only a general public loss of faith in Mr Johnson's absolute in- fallibility in all matters could have brought them to revolt. Moreover, the comments of the strikers as they voted against what the President had thought an unusually handsome concession were markedly personal in their bitterness to- wards him; it was obvious that, whatever his people extort from him henceforth, they will give him no thanks for it.

Within a week, the owners had followed .the workers, and the last wall against inflation had been broken. The steel industry, held in check since President Kennedy's war of surprise against it in 1962, was emboldened to raise its wholesale prices by an average of 2 per cent. It was difficult to complain against this break- through; the steel companies, having been made a symbol, have for four years now been deprived of the abnormal profits which have otherwise' been the normal national pattern.

But the ambience of this event was evidence of a permanent change in a government which could occasionally exercise control to one which must always accommodate. The price increases, for example, were first announced by Mr Joseph Block of the Inland Steel Company; it was Mr Block whose defection from the industry's front in 1962 and refusal to go along with the higher steel prices announced then made it possible for President Kennedy to beat back that aggression. Mr Block remains as close to the Democrats as a wing to a fly; his decision to lead the steel in- dustry's offensive was an obvious proclamation that the administration could find no weaknesses in that front. Mr Johnson's response was a re- treat that was silent except for one mild protest from the chairman of his Council of Economic Advisers, a lieutenant of the most moderate authority.

That Mr Johnson is beginning to grow used to defeat was indicated by the rapidity with which his friends discovered its consolations. The Presi- dent, as summer goes on, grows more and more obsessed with the November elections; and, in a country as wealthy and complicated as this one, a mind sufficiently given over to political considerations can almost always find some advantage in any event however desperately avoided before. The stock market rose in a direct response to the steel industry's demonstration that business had nothing more to fear from Washington, and this removed from the Presi- dent the unpleasant prospect of the first August in which the market would fail to go up in a decade. The country was restless over food prices to be sure; but administration spokesmen were reminding the timid that the voters generally associate inflation with flush times and seldom punish a government which permits it.

The President would sit back then and allow prices to settle at a higher plateau, and he seemed to those who saw him last week as content to let events rule him as he had once been so proud to rule them. There was evidently a lot of ruin in him too.